"Perhaps the sentiments put forth here are not yet sufficiently fashionable to procure them general favor. A long habit of not thinking a thing wrong gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason."
--Thomas Paine

Monday, September 26, 2016

The Tweet: Hillary's words and tone repel voters she needs to win. The election may be won by the candidate able to pivot away from their own worst rhetoric.

Hillary has seen a bit of a bounce since the debate last week. But as well as she did in that debate, her bounce may have been as much about Donald Trump's determined effort at self-immolation as any material improvement in Hillary's own favorability ratings. Just as Trump manages to boost his own unfavorability ratings by late night tweets and other unforced errors, Hillary has proven to be her own worst enemy.

"Why aren't I 50 points ahead?" she wondered aloud last week, words that now headline a new Trump commercial. "If you do know somebody who may be thinking of voting for Trump," she continued, "stage an intervention." Well, I know a number of people who are thinking of voting for Donald Trump, and I am quite sure that an intervention would be about the worst possible strategy to walk them back from the edge.

None of them are under any illusions about who Donald Trump is. And by and large they are not deeply hostile to Washington, DC--or at least don't imagine that it is something he could fix--or believe that trade deals, Muslims or Mexicans are the cause of whatever ails us. I am quite convinced that it is Hillary herself--not Benghazi or her emails--that they find off-putting. It is the disdain her words convey--in tone and in substance--toward those who have not embraced her.

This is all of a piece with Hillary's earlier speech to a room of LGBT activists in which she described a broad swath of Trump supporters as deplorable, or worse, as irredeemable.

Irredeemable is a harsh word. Americans believe in redemption. If the congregants of the Charleston, S.C. church could forgive Dylann Roof for shooting their friends and loved ones, who is Hillary Clinton to say which of her opponent's supporters are beyond redemption.Hillary's words were particularly striking, standing as she was before an LGBT audience. No doubt there were many in that audience who had loved ones in their lives who had difficulty accepting their gay or transgendered child or grandchild, who would have fallen into Hillary's basket of deplorables, yet who found redemption through their love and ultimate acceptance of their LGBT family member. Belief in redemption, and appeals to the better angels of our nature, has been essential to our continued growth as a nation. Imagine if, instead of the language she chose, Hillary had used that occasion to elevate the election year discourse, with words along the lines of the following:

“You know, we have come a long way as a nation, as the LGBT community knows better than any other. Yet we have far to go. This has been a harsh election campaign, filled with too much rhetoric blaming others for our setbacks and fears, and not enough compassion for those whose lives and communities are different from our own. It is time that we step back from blaming others, and strive instead to be a nation where--as my husband used to famously say--we feel each other’s pain."This year, during the Republican primary season, several candidates reached out to communities that have been beset by heroin and opiate abuse. Those candidates showed far greater compassion to those who were suffering than Republicans had, as a general matter, in years past. For many years, 'Just Say No' was the official Republican response to those individuals and communities—largely communities of color back then—that were being ravaged by drugs. Now, they have shown a greater ability to feel the pain of working class white communities that are suffering, and suffering deeply. "And so must we all. Your communities, the LGBT communities, understand perhaps as well as any others, the pain of silent suffering, of being shunned or shamed. Therefore, your communities should have the greatest capacity to reach out and demonstrate empathy to others who are suffering, however different those communities might be from your own. "This is what our nation needs now. This is a time when we must expand our capacity for empathy, rather than stigmatize or lash out at communities whose experiences and perspectives are different from our own. We should remember that each person's struggles, each community's pain, is as real as our own, and as worthy of compassion. And we should never let the daily battles of our politics obscure the fact that it is through that compassion, through that capacity for empathy, that we grow as a people and as a nation.”

In the two upcoming debates and in the final weeks of the campaign, it remains Hillary's challenge to recognize—and seek to get past—the not-so-subtle arrogance that she demonstrates all too often in her language that implies that she somehow occupies a morally higher ground. This is the language and disposition that sets many people’s teeth on edge when Barack Obama, for all his gifts as an orator, talks about “teachable moments,” a term that in no unsubtle way says “I am the teacher, I know more than you do.”

That is the tone and stance that pushes away my friends who might otherwise vote for Hillary, who are otherwise likely to vote for Trump. I understand this, and I respect both their perspectives and their choices. No doubt we will discuss it and argue about it through Election Day, but these are political choices, not a disorder of some kind that warrants an intervention.

The essence of democracy is the belief that each vote matters, and, in asserting that, confirming that each person matters. It is an enduring puzzle of Hillary's candidacy: how could the woman who has lived her entire adult life with a man who knew instinctively how and why to “feel people’s pain,” be so apparently lacking in a gut sense of connection with and empathy toward so many people in the world around her.

This is a year when both major candidates, each in their own way, have stigmatized and labeled the other, to their political advantage. There certainly is nothing new in this, after all, four years ago, the 1%, the 47% and Americans clinging to guns and religion were each used as political props. But this year's language has reached new extremes. Now, Donald Trump and Hillary Clinton are in a tight race, each seeking ways to make themselves acceptable to segments of the electorate--notably white, suburban women, who may yet tip the balance. The winner in remaining debates, and the winner in the election, may well turn out to be the one who is most able--or least unable--to pivot away from the worst of their own rhetoric, and demonstrate the capacity to connect, just a little bit, with those whom thus far they have chosen to disparage and disdain.

Sunday, September 25, 2016

The Tweet: HRC wants to raise the Estate Tax to 65%. Maybe her campaign believes this will bring Bernie voters onboard. I think they have simply lost their minds.

Maybe it is just me, but why would Hillary Clinton pronounce to the world that she wants to raise the estate tax to a whopping 65%. I get it, it would be on the billionaires, and we all want to get a piece of their money. It is about income inequality, and perhaps a bit about plain old jealousy.

But the politics of it baffle me. Right now, six weeks or so before Election Day. Is it because the icon of the left, Elizabeth Warren, just got a lot of face time undressing Wells Fargo CEO John Stumpf about that bank's most recent egregious conduct--paying a fine of $185 million, along with a bonus of $123 million to the executive whose conduct led to the fine--so Hillary is under a bit of competitive pressure to up her game as a warrior for the left? Has her campaign calculated that the estate tax rate pronouncement will be the final appeal necessary to bring Bernie voters into the fold?

Or have they simply lost their minds?

I think this hurts more than it helps. With respect to recalcitrant Bernie voters, it only validates once again their deep conviction that Hillary will say whatever it takes to get elected. Why else would she say it now, on the eve of the election, if it wasn't part of her plan before? It is just further evidence that her convictions are transactional.

On the other hand, what better way to spook independents, and the 20% or so of persuadable Republicans who are hanging in the balance between her and Donald Trump, than by lobbing a huge tax increase out there. I know, it is supposed to be about taxing billionaires, but the truth is that it will be read by swing voters as a cavalier proclivity to go after other people's money. First, it is the billionaire, who knows who will be next.

This is, of course, the defining difference between Democrats and Republicans. Before the Reagan Revolution, the consistent trope of Republicans was that Democrats liked to tax and spend. Then the GOP learned to love spending, leaving the defining difference that Democrats like to tax. And that, in case they have never noticed over the years, is a practice that few across the electorate are actually fond of.

But the point is: why say anything at all about taxes? The man she is running against has proposed enough spending increases and tax cuts to outstrip anything Clinton might do in her wildest dreams. Sure, he has scaled back his original tax cuts--which were estimated by the conservative Tax Foundation to cost the federal government $10-12 trillionin foregone revenues over a ten-year timeframe--to a more modest $3-6 trillion. And that is just on the tax cut side of the ledger. Add in his plan for beefing up the Pentagon, doubling Hillary's proposed level of infrastructure spending and his commitment not to touch core entitlements, and Donald Trump's fiscal plans are beyond the wildest dreams of any Democrat, much less an independent socialist from Vermont.

When Bernie Sanders proposed a college tuition entitlement with an annual cost of $50-60 billion, the cacophony of demands for the details of how he was going to pay for it was deafening. And so it goes for any Democrat spending initiative, as the deficit hawks circle in the skies, looking for blood. But as to the trillions that Donald Trump has proposed to add to federal deficits, we have heard barely a word. Some of it is because no one really takes anything Trump says seriously, and some of it is the double standard that has come to be applied to Democratic fiscal plans vs. Republican tax cuts.

So why on earth would Hillary indulge this media double standard? And why would she commit the fatal sin of Walter Mondale in his debate with Ronald Reagan. Back then, as now, Mondale felt obligated to tell the world he would raise taxes, while Ronald Reagan simply promised the world tax cuts, feeling no obligation to say how he would be paid for them. Growth, the Gipper insisted, with a wink and a nod. Growth will pay for it all.

And that is Donald Trump's answer today. Even Trump's closest economic advisors don't try to mask the enormity of the deficit hole that his tax cuts and spending plans would create. Writing in the Washington Post this week, UC Irvine business school professor Peter Navarro and investor Wilbur Ross trumpet the growth that his plans would create. "Trumpnomics would generate millions of additional jobs and trillions of dollars in additional income and tax revenue."

This is the dynamic scoring argument that has been used since the Reagan era to justify moving away from traditional balanced budgets. And sometimes it works and sometimes it doesn't. But unlike prior versions, this time around neither Navarro and Ross, nor the Tax Foundation, deny that Trump's program would cost less than trillions of dollars under the rosiest of scenarios. Their argument is that growth is good.

And indeed it is. It may not cure all ills, but whatever ills it does not cure are only made worse without it. Growth, Hillary, that is the word you should be looking for. Forget tax hikes, just point to growth, and call it a day.

Saturday, September 24, 2016

The Tweet: Showing bounds of ambition that exceed the bonds of family, Ted Cruz gave it all up for Trump. Meanwhile, Bush 41 showed what love of country looks like.

Ted Cruz did it. The final capitulation. The heat down in Texas must have been unbearable on Senator Cruz. The threats of primary challenges in 2018 stood as an obstacle to his ultimate ambition of running against President Clinton in 2020. So Ted Cruz endorsed the man he quite accurately labeled a pathological liar--the man who humiliated his wife and slandered his father--showing again that the bounds of ambition exceed the bonds of family.

He cloaked his perfidy within the longest Facebook post imaginable. A tweet would have sufficed. Instead, Cruz went on... and on... falling back, ultimately, on the binary election logic that felled his compatriots. Marco Rubio laid it out eloquently when Rubio endorsed the man he had accused of being a con man: better a con man who stands for nothing than the Hillary Clinton that has been so diligently demonized by the Republican Party for so long. "By any measure," Ted Cruz declared--his famous ability to against the tide of Republican opinion escaping him--"Hillary Clinton is wholly unacceptable."

But a con man and pathological liar is just fine? From the days following Cruz's defeat in the Indiana primary, when he finally gave up the ghost on his presidential campaign, GOP leaders have struggled to find their rationales for why the con man who has no casual acquaintance with the truth would nonetheless be an acceptable choice for the Oval Office.

Some, like Speaker of the House Paul Ryan, have convinced themselves that the man who envisions tax cuts estimated to cost between $2.6 and $5.9 trillion, while committed to massive increases in defense and non-defense spending, would nonetheless embrace the Ryan Plan budgets. Others assure themselves--with no evidence to support it--that when the time comes, Trump's thin skin and quick twitter finger will give way to a presidential demeanor and better judgement.

And so it is now with Ted Cruz. In his Facebook manifesto, Cruz points to the six key issues that made his choice necessary. The Supreme Court, of course is number one. Donald Trump has hung the Court over the GOP like a cudgel. Cruz was accurate in his assessment of the dangers Trump poses to the Republic, but all that is set aside in deference to Trump's promise "to appoint justices 'in the mold of Scalia."' The rest of Cruz's manifesto is little more than standard Republican talking points. Obamacare. Unleashing America's energy sector. Immigration. Terrorism. And finally, in the ultimate irony of a man issuing his political manifesto on Facebook, Internet freedom.

Cruz concludes with an Orwellian summation. "Hillary Clinton is manifestly unfit to be president... and Donald Trump is the only thing standing in her way." Manifest unfitness to serve. This is an odd place for Cruz to stand his ground, as polling has consistently suggested that 60% of the public deems Trump unqualified to serve as president, while a comparable percent say Clinton is qualified. After many months of contemplation and prayer, it seems evident that Ted Cruz has decided to set aside his higher duty to the nation, and join that share of the electorate that is choosing to vote for a man they believe is unqualified to serve.

In the days before Ted Cruz offered his long-winded rationale for his final capitulation, another Republican holdout reached a different conclusion. Speaking with members of a board on which he serves, former President George H. W. Bush indicated that he would be voting for Hillary Clinton. Bush '41 is a forgotten man in the Republican pantheon. A patrician of the northeastern Republican tradition, he was part of, but never a true believer in, the Reagan Revolution. He opposed his son's military adventurism back when Donald Trump still supported it. But, most importantly, he was, and clearly remains, a believer in America and its role in the world.

It is in the international arena that Donald Trump presents the greatest risk for America. Perhaps he will surprise the world as President. Global adulation was over the top for Barack Obama, and he failed to live up to the unreachable hopes and dreams that were laid on his shoulders, and now global apprehension regarding a Trump presidency might be similarly beyond the bounds of reasonable pessimism. Perhaps, as in the upcoming debates, Donald Trump can only exceed expectations as President because the bar will be set so low.

But for George H. W. Bush, it is not enough to hope and pray that Trump is not who he appears to be--as many Republicans are doing today. Bush is enough of a realist to judge a man by his words and stated aspirations, and Donald Trump's words suggest a bleak future for the New World Order that George H. W. Bush did so much to create.

The first President Bush was among the principal architects of the world order that Donald Trump is running against. Bush worked in Washington during the Cold War, and imagined a world where the west and the nations behind the iron curtain would compete economically instead of through nuclear brinksmanship. And that is the world that has come to be, and one that has changed the face of our nation. Jeb Bush spoke his father's words in the Republican primaries, celebrating the globalized world and the energy that immigration brings to our country, while embracing the stern, pre-Trumpian GOP mantra that in this new world order workers and families facing economic competition must pull themselves up by their bootstraps, go back to school, and do whatever it takes to make the lives of the next generation better, if the current generate faces hardship.

President Bush could not buy anything that Donald Trump is selling. The fomenting of anti-immigration resentments, the victimhood of the core Trump electorate, the bleak portrait of America being sold by the New York billionaire, perhaps the blatant courting of radical right, and--more than anything--the mercantilist perspective that abdicates America's leading role in the world.

By all appearances, Ted Cruz capitulated to Donald Trump out of his own political self-interest, and yet it seems inevitable that in abdicating his principled stance, and showing political weakness and venality, he will be punished over time. Should Donald Trump lose, the repercussions within the GOP will be fierce, and Cruz's capitulation will cost him. Should Trump win, Cruz will become irrelevant to the party, to say nothing of being vulnerable to whatever vengeance Trump chooses to exact on him for his slanderous words. Trump is a man from the world of Jimmy Breslin, after all, a world where revenge is a dish best eaten cold.

Ted Cruz looked all the worse against the backdrop of Bush '41. George H. W. Bush was never appreciated as a man of principle, yet in this toughest of moments for Republicans, he showed his convictions. Cruz, on the other hand, has carefully cultivated his image as a man of principle, standing against the expediencies of the moment. He was facing was a lose-lose situation, and perhaps it would have cost him either way he played it. But if he didn't cry no mas as he did this week, at least then he could have moved on with his integrity intact.

Saturday, September 17, 2016

The Tweet: Negative interest rates, a concept that many struggle to comprehend, reflect an urgent effort to kick-start economic growth in moribund economies. It is a race against time to forestall the rise of populism and the loss of confidence in democratic institutions.

It is all connected: flat growth in Europe and continuing deflation in Japan, the rise of right-wing political movements, and central bank policies leading to negative interest rates across the globe.

Negative interest rates. The concept inherently makes no sense. Interest rates are often described as the price of money. If a price of something is negative, it suggests that someone will pay you to take it off their hands. And that is actually the case with money today. Investors now give money to most governments in Europe with the promise of getting back less money later. Not less money adjusted for inflation, but less money.

Negative interest rates and the rise in populist political movements in Europe are both linked to bad economic conditions. While mainstream politicians and economists might deny we are in a global recession, the fact remains that economic growth is flat to negative across a large swath of southern Europe, growth in Germany is barely positive and Japan remains in a deflationary spiral. Trump voters may not believe it, but the United States is actually the good news story today in global economics.

In subtle ways, negative interest rate policies and populist political movements are reinforcing each other. Negative interest rates are a radical effort by central bankers to kick-start their moribund economies, while that same economic weakness is emboldening right wing political parties that have historically won popular support in bad economic times. Right wing politicians are pointing to the failure of central bank policies as evidence of the corruption and incompetence of the old order they propose to replace, while central bankers fear that continued economic weakness will further public unrest, weakening faith in democratic institutions and ultimately threatening the integrity of the European Union.

Just a couple of years ago, few economists imagined that negative interest rates could be a sustainable national policy, and yet, today, negative interest rate policies have been embraced by 23 advanced industrial nations as they struggle to rekindle economic growth. Monetary policy--the basket of tools that central banks use to modulate economic activity and control inflation--used to be constrained by "the zero lower bound," meaning that rates could not go below zero.

Today, there is no longer a theoretical floor beneath which interest rates cannot go. While estimates vary, across the globe as much has half of publicly global government debt--$10 trillion or so--now trades at negative interest rates, as illustrated here. And it is no longer limited to governments. Bonds issued by several European companies, including Shell Oil, Siemens and Unilever have negative yields.

As a general matter, we tend to think of falling interest rates as a boon to the economy, for governments in particular. As the long-term cost of capital declines, investments of all types became more affordable. Homeowner refinance mortgages, freeing up household cash for other purposes. Lower interest rates mean that your credit is good. If lower rates are better than higher rates, why aren't negative rates better than positive rates?

They aren't better because they speak to a global economic that is broken, and where politicians and central bankers are taking extraordinary and desperate measures to put Humpty Dumpty back together again after all of the traditional strategies have failed. Over the past two years, as negative interest rate fever has spread across advanced economies, I have taken every chance I can to ask people I run into--economists, bankers, traders, hedge fund managers (yeah, I know, I need to get out more)--what they think of negative interest rates. To a person, they are befuddled. No one knows what the implications are going to be, because we have never traveled this path before, and, importantly, the longer interest rates remain negative, the more troubling becomes the question of how we get back to the world that we once knew.

Now that we have crossed the great barrier of what was once the zero lower bound, we are literally in uncharted waters. Negative interest rate policies and quantitative easing are flooding the world with cash. Asset values held by the wealthiest are rising, while for the average family and for retirees savings are being gutted. And few, if any, public officials can tell their constituents what it all means and where we are headed, leading to a spiraling downward in public confidence in political and central bank leadership. In Japan, where negative interest rates are now being felt at the household level, the Bank of Japan is facing growing demand for large denomination bills. Imagine what it means to a modern economy that depends on a functioning banking system if people conclude--as a matter of rational analysis, not conspiracy theory--that cash literally stuffed into a mattress is worth more over time than savings deposited in a bank.

It has now been nine years since the summer of 2007 when global markets first started to seize up, and eight years since the global collapse in 2008. Eight years is not a long time in the lifespan of major economic collapses and recoveries, based on comparisons with comparable banking system collapses in the past--as Harvard economists Carmen Reinhart and Ken Rogoff document their book, This Time is Different--but it is a lifetime in a democracy.

As the post-2008 economic stagnation has dragged on and popular discontent has grown, Europe has seen the rise in right wing political movements across the continent. The 2008 collapse is not the cause of all that that is ailing the advanced industrial economies--arguably the immigration crisis in Europe is now a greater source of societal stress there than economic stagnation--but it has exposed deep tensions between our economic system and democratic institutions.

Historical data suggests that recovery from a major economic collapse can take a decade or more. Policymakers know--as recent elections across Europe have demonstrated--that the public lacks anything close to that kind of patience. Negative interest rates--an economic strategy that has never been tried before, and a concept that many struggle to comprehend--reflect the pressure that global central bankers are under to jumpstart the world economy as public discontent continues to deepen.

It is impossible to say whether negative interest rate policies are working or not, as it is impossible to know what conditions would be in Europe today were those policies not being followed. But we do know that things could be worse, a fact that cannot be far from the minds of European policymakers as they see the rise in right wing parties across Europe today. In the wake of the last global economic collapse--eighty years ago--the rise of right wing parties was swift and furious. By early 1933--a little over three years into the Great Depression that came after the 1929 collapse--Adolf Hitler was elected Chancellor of Germany.

Wednesday, September 14, 2016

The Tweet: Gaffe or strategy, Hillary's words focus attention on who Trump is, and the fringe groups that will march into the White House with him if he wins.

It just seemed like an incredibly dumb thing to do. Regardless of what one thinks of the xenophobes and racists that constitute a fair share of Donald Trump's base, how could Hillary call a large share of his supporters deplorable?

I understand that polls suggest that 65% of Trump supporters believe President Obama is a secret Muslim, and that 59% buy into Donald Trump's Birther theory. It does not surprise me to read that 40% of Trump supporters believe that Blacks are lazier than Whites, that 31% support banning gays from the United States, or that 16% are white supremacists. Not one of those figures surprise me. This is America; it is an enormous country and full of people whose views I disagree with. And many whose views I find deplorable.

Donald Trump has pandered to the most chauvinist elements in the country from the opening minutes of his campaign. He just made an impresario of the alt-right--that loosely knit community of white nationalist, white supremacist, anti-semitic, nativist and other reactionary groups that live at the far right fringe of American politics--the head of his campaign. He has turned the nation's politics into a Kindergarten sandbox of name-calling and spite.

Donald Trump's fragile ego, his erratic narcissism, and his wanton affiliations with the most extreme reactionary groups in our country constituted Hillary Clinton's single greatest competitive advantage. Why then, in one scripted moment, would the Clinton campaign give away the moral high ground by resorting to partisan name-calling? As much as her supporters might claim that the data above supports her words, insulting the electorate is something you just don't do.

It all makes no sense. It is hard to fathom how a woman who has been mentored for decades now by Bill Clinton could make such a stupid mistake. Bill Clinton was weaned in the real world of politics--southern politics at that--not some imaginary world where people all believe and behave as we might wish they would. He did not berate voters he disagreed with, instead, he famously felt their pain, and then pandered to them when electoral realities warranted.

Bill Clinton's welfare reform, his Sister Souljah moment, and his crime bill were all tailored to appeal to the prejudices of the white working class voters who are now flocking to Donald Trump. Hillary's denunciation of Black "super predators" was supposed to mark her own rite of passage into the realpolitik world of dog whistles, that well honed art of pandering to the less educated white electorate whose votes have been critical to both major political parties for decades.

With that history, it seems inconceivable that Hillary's words were an off-the-cuff gaffe. This was not Barack Obama caught talking off camera eight years ago, with his prescient description of the Trump electorate: "They get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations." Hillary's words were in the written text of her remarks, they were loaded into the teleprompter.

That is to say, they were deliberate, pre-meditated. Given the incendiary nature of the content, using that language had to have been a strategic decision.

Hillary Clinton is not the only one who disdains the xenophobes, homophobes and racists--as she describes them--who are flocking to Donald Trump's banner. A large share of the electorate of both political parties has been disgusted by Trump's success in dragging the presidential race down into the deepest gutter of our politics, while elevating those whose views are most repugnant to a new level of respectability. This was the point Hillary made right after the controversial "basket of deplorables" comment:

"And he [Trump] has lifted them up. He has given voice to their websites that used to only have 11,000 people -- now 11 million. He tweets and retweets their offensive hateful mean-spirited rhetoric. Now, some of those folks -- they are irredeemable, but thankfully they are not America."

This, indeed, has been Donald Trump's seminal achievement. He has elevated and legitimated truly odious political forces, even has he has moved in recent weeks to elevate his own stature and respectability. One has to imagine that as the Presidential race tightens and moves into its final weeks, the intention behind Hillary's remarks was to refocus media and public attention on who Donald Trump is--who he was as the champion of the Birther movement, who he was during the most egregious moments of the Republican primary season, and who he was when he chose Steve Bannon, the chairman of Breitbart Media and champion of the alt-right movement, to be the head of his Presidential campaign.

Campaign tactics are not always what they appear to be. Over the past several weeks, Donald Trump has reached out to the black community, with visits to Detroit and Philadelphia, yet the focus of those efforts was about improving his standing among educated white Republican women, a demographic that he is losing badly. Looked at from that perspective, Clinton's words look like a deliberate tactic to remind voters--particularly those same educated white Republican women who dislike the racial and anti-immigrant tenor of the Trump campaign--exactly who they are getting in bed with.

Donald Trump has reacted predictably to Clinton's words, arguing that the disrespect that she showed for his voters should disqualify her from public service. But he is on shaky ground. The more vehement he becomes in defense of his most angry and loyal voters--who wildly cheer his most egregious comments--the more he risks proving Clinton's point, and in turn alienating other potential voters.

Each time the Trump campaign struggles to disavow their strong support among fringe right wing groups, it is one more reminder that the influence of the alt-right now permeates the Trump campaign organization. This week, Mike Pence struggled to explain away the support of former Ku Klux Klan Grand Wizard David Duke, even as he refused to acknowledge that Duke's views are deplorable. David Duke's response on Twitter applauding Pence's words could only add fuel to the issue.

The race has been tightening, as this graph from 538 politics suggests, with momentum swinging in Donald Trump's direction. His high negatives remained evident in newly released polls, but the impact of his most outrageous comments has been fading. Hillary's campaign knows that her best chance of winning is if the race is a referendum on Donald Trump. Her words may have been a gaffe, or it could have been part of a strategy--albeit a risky one--to refocus voter attention on who Donald Trump is, and who will be marching into the White House with him, should he win this November.